Federal Reserve chairman Ben Bernanke warned the House Budget Committee that “the federal budget appears to be on an unsustainable path,” and then offered that the actions taken were necessary to ease the pain of recession. Uh yeah, ya think? Who would have ever thought that the federal budget would get out of control? Then again, it was needed to ease the pain? What? That is like saying that filing for bankruptcy is okay. Guess what? It’s not okay. In the real world, when you don’t pay the water bill, they shut off your water to ease some of your pain.
In nearly two hours of questioning by the House Budget Committee, however, Mr. Bernanke gave potential succor to members of both parties, while refusing to side with either of them.
To Republicans, he offered warnings about the fiscal perils of an aging population and the potential threat of soaring long-term interest rates. To Democrats, he made it clear that persistently high unemployment was a drag on growth and said that additional short-term stimulus spending might be needed.
All the while, Mr. Bernanke refused to endorse any particular spending cuts or tax increases, or even specify the balance between the two. And he was not subtle about his strategy.
“I’m trying to avoid taking sides on this because it’s really up to Congress to make those decisions,” he told Representative Michael K. Simpson, Republican of Idaho.
“But we need your expertise on it,” Mr. Simpson pressed.
“Well, no,” Mr. Bernanke replied. “Plenty of people have that kind of expertise, including the Congressional Budget Office and others.”
With inflation well below the Fed’s unofficial target of about 2 percent, attention has turned to the other side of the central bank’s mandate: maximizing employment. At the same time, the debt crisis roiling Europe has made deficit-cutting a potent topic.
Mr. Bernanke suggested that the United States had a while longer — but not much — before it would have to pull in the reins.